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China plans to establish a comprehensive, nationwide unified power market system by 2030, targeting approximately 70 percent of electricity consumption to be transacted through market-based mechanisms, according to recent guidelines issued by the State Council’s General Office.
By 2030, all types of power generation and electricity consumers—excluding those with guaranteed supply—will participate directly in the power market, as outlined in the new directives. The goal is to achieve full system integration by 2035, ensuring smooth coordination of inter-provincial, inter-regional, and intra-provincial transactions, so that the various values of electricity resources—including energy efficiency, regulation, environmental impact, and capacity—are accurately reflected through market pricing.
The guidelines specify 19 key tasks to guide development, emphasizing the optimization of nationwide electricity resource allocation, enhancement of market functions, broad and equitable participation of different business entities, creation of a unified power market framework, and strengthened policy coordination.
A phased approach is proposed, moving from “individual pricing and trading within each province” to “a unified pricing and joint trading system.” The plan encourages neighboring provinces to cooperate voluntarily, expand cross-regional power transmission, and increase the share of clean energy supplies. Implementation plans also include developing an integrated power market in southern China and improving electricity assistance mechanisms in the Yangtze River Delta.
Authorities will explore establishing a capacity market designed to compensate support and regulation resources such as coal-fired plants, pumped hydro storage, and new energy storage systems for maintaining grid stability and promoting renewable energy use. For large-scale renewable projects in desert regions and distributed renewable sources, tailored market access pathways will be introduced. The plan also suggests exploring long-term green electricity contracts to better serve export-driven companies and foreign-invested enterprises.
The directives emphasize increasing private sector participation in the power market, promoting innovative trading models led by private firms—such as energy storage, virtual power plants, and smart microgrids. Small and medium-sized commercial and industrial consumers, who currently purchase electricity through grid agents, will gradually gain direct market access.
A recent analysis highlighted that the capacity market might become a central focus in the next phase of market development, with investors advised to explore opportunities in base-load power generation, energy storage, and related supply chains.
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